NEW YORK (TheStreet) -- Abbot Laboratories (ABT - Get Report) posted mixed results in their 2014 first quarter earnings report released on Wednesday.
Excluding special charges, the healthcare product manufacturer posted a net income of $375 million, or 41 cents per share, for the quarter ending March 31. That beat analysts consensus EPS estimates of 36 cents per share.
However, year over year quarterly revenue fell 2.6% to $5.24 billion from $5.38 billion missing analysts estimates of $5.29 billion.
The company also reaffirmed its guidance range of $2.16 to $2.26 EPS for fiscal year 2014.
TheStreet Ratings team rates ABBOTT LABORATORIES as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate ABBOTT LABORATORIES (ABT) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and relatively poor performance when compared with the S&P 500 during the past year."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ABT's revenue growth has slightly outpaced the industry average of 2.7%. Since the same quarter one year prior, revenues slightly increased by 0.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- ABT's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.27, which illustrates the ability to avoid short-term cash problems.
- The gross profit margin for ABBOTT LABORATORIES is rather high; currently it is at 57.82%. Regardless of ABT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 10.42% trails the industry average.
- In its most recent trading session, ABT has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income has significantly decreased by 44.0% when compared to the same quarter one year ago, falling from $1,053.46 million to $589.55 million.
- You can view the full analysis from the report here: ABT Ratings Report